A. For a policy issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required by Subsection B of Section 59A-8A-3 NMSA 1978, except as provided in Subsection D or F of this section.
B. Unless an amendment to the valuation manual provides for a later effective date, an amendment to the valuation manual takes effect on the January 1 after the date that the amendment was adopted by the national association of insurance commissioners by an affirmative vote of:
(1) at least three-fourths of the members of the national association of insurance commissioners voting, but not less than a majority of the total membership; and
(2) members representing jurisdictions that collectively represent more than seventy-five percent of written direct premiums, as reported in the life, accident and health annual statements, the health annual statements and the fraternal annual statements most recently available before the time of the vote referred to in Paragraph (1) of this subsection.
C. The valuation manual shall indicate:
(1) minimum valuation standards for and definitions of the policies or contracts subject to Subsection B of Section 59A-8A-3 NMSA 1978, including:
(a) the superintendent's reserve valuation method for life insurance contracts, other than annuity contracts, subject to that subsection;
(b) the superintendent's annuity reserve valuation method for annuity contracts subject to that subsection; and
(c) minimum reserves for all other policies or contracts subject to that subsection;
(2) which policies and contracts or types of policies and contracts are subject to the requirements of a principle-based valuation in Subsection A of Section 59A-8A-9 NMSA 1978 and the minimum standards of valuation consistent with those requirements;
(3) for policies and contracts subject to a principle-based valuation pursuant to Section 59A-8A-9 NMSA 1978:
(a) requirements for the format of reports filed with the superintendent pursuant to Paragraph (4) of Subsection B of Section 59A-8A-9 NMSA 1978, which shall include information necessary to determine if the valuation is appropriate and complies with the Standard Valuation Law;
(b) prescribed assumptions for risks over which the company has no significant control or influence; and
(c) procedures for, and a process for appropriate waiver or modification of, corporate governance and oversight of the actuarial function;
(4) for policies not subject to a principle-based valuation pursuant to Section 59A-8A-9 NMSA 1978, the minimum standard of valuation shall either:
(a) be consistent with the minimum standard of valuation in effect prior to the operative date of the valuation manual; or
(b) provide for reserves that quantify the benefits and guarantees and the funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events with a reasonable probability of occurring;
(5) other requirements, including those related to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memoranda, transition rules and internal controls; and
(6) the data and form of the data required by Section 59A-8A-10 NMSA 1978, the person with whom the data must be submitted and, if appropriate, data analyses and reporting of analyses.
D. In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual does not, in the opinion of the superintendent, comply with the Standard Valuation Law, then a company shall comply with the minimum valuation standards promulgated by rule by the superintendent.
E. The superintendent may engage, at the company's expense, a qualified actuary to conduct an actuarial examination of a company and issue an opinion on the appropriateness of the company's reserve assumption or method, or to review and issue an opinion on the company's compliance with a requirement of the Standard Valuation Law. The superintendent may rely upon the opinion of a qualified actuary engaged by the insurance supervisory official of another state, district or territory of the United States if that opinion relates to the provisions of the Standard Valuation Law. As used in this subsection, "engage" includes employment and contract employment.
F. The superintendent may require a company to change an assumption or method if the superintendent believes that the change is necessary to comply with the requirements of the valuation manual or the Standard Valuation Law. The company shall adjust its reserves to comply with the superintendent's requirement.
History: 1978 Comp., § 59A-8A-8, enacted by Laws 2014, ch. 59, § 22.
ANNOTATIONSCompiler's notes. — Pursuant to Laws 2014, ch. 59, § 55, the effective date of Laws 2014, ch. 59, §§ 15 through 27 was January 1, 2017. On June 30, 2016, the superintendent of insurance certified to the New Mexico compilation commission and the director of the legislative council service that:
(1) the most recent version of the manual of valuation instructions adopted by the national association of insurance commissioners has been adopted by the national association of insurance commissioners by an affirmative vote of at least forty-two members or three-fourths of the members voting, whichever is greater;
(2) the Standard Valuation Law of the national association of insurance commissioners, as amended in 2009, or legislation including substantially similar terms and provisions, has been enacted by states that collectively represent more than seventy-five percent of written direct premiums, as reported in the life, accident and health annual statements, the health annual statements and the fraternal annual statements submitted for 2008; and
(3) the Standard Valuation Law of the national association of insurance commissioners, as amended in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least forty-two of the following fifty-five jurisdictions:
(a) the fifty states of the United States;
(b) American Samoa;
(c) the Virgin Islands of the United States;
(d) the District of Columbia;
(e) Guam; and
(f) Puerto Rico.
Severability. — Laws 2014, ch. 59, § 54 provided that if any part or application of the provisions of Laws 2014, ch. 59 is held invalid, the remainder or its application to other situations or persons shall not be affected.